By Liz Sak, Cricket Island Foundation
This posting original appeared on Smart Assets The Philanthropy New York Blog, April 3, 2012.
When the 2008 financial crisis hit, endowments of smaller foundations were hit hard. We all knew the recovery would take time. We just didn’t know how long.
In Diminishing Dollars: The Impact of the 2008 Financial Crisis on the Field of Social Justice Philanthropy, a report we recently helped produce in partnership with Foundation Center, we found that social justice grantmaking levels through 2015 will remain below 2008 levels, unless the smaller funders who primarily support community-based social change see 5 years of above-average investment returns.
We believe these results can be extrapolated to the broader funding community.
This is all hardly surprising given the slow and unsteady recovery of the economy. I hear from our grantees almost daily about the challenges they are facing: increased need meets decreased resources. Just this week, two grantees called to tell me they were considering sunsetting. They are asking for help and guidance; they are asking for greater transparency and support. I know mine are not the only grantees struggling, and the loss of funding will create instability more broadly in low-income communities across the country.
So the question for all of us is, What’s next? What can we, in the funding community, do about this perfect storm of bad news for our grantees?
The answer is we need to do more and do things differently. We need to find different ways to support our grantees, beyond dollars. We need to learn how to be critical partners, on the same side of the table as our grantee but challenging them to adapt to these changing times. We need to collaborate in the very same ways we expect from our grantees, pooling resources and ideas for greater impact.
The report served as a catalyst for discussion among foundations concerned with the sustainability of the social change field. It became clear that we need an organized response to the present and anticipated conditions in the philanthropic sector. A Working Group emerged from these conversations, created by several colleagues concerned about the sector, as a venue for considering what action we can take—individually and collectively—to confront the problem and ensure that the field retains the substance and infrastructure to continue to do important work during these difficult times.
We also, and perhaps most importantly, want to create a space for informal support and guidance on how to do our work differently during this critical time. It will be for funders only and be designed as a safe space for learning and problem-solving about the incredible challenges currently facing the field.
We believe that, as funders, we have greater access and more relationships (as well as a broader perspective) than any single organization might and therefore can serve the field by turning our attention to its continued viability.
The time for action is now, and we invite our colleagues to share their ideas and join in the proposed Working Group. E-mail me if you’re interested in joining us
Liz Sak is executive director of the Cricket Island Foundation, a private family foundation started in 2001 that funds youth-led social change programs nationally with a particular emphasis on emerging organizations that work with extremely marginalized populations. Its board includes three generations of family members, ages 19–80.
